EP 443: $30K Months from Memberships? The Spa Revenue Strategy You’re Not Using (Yet)

All right, welcome back to another episode of the Spa Marketing Made Easy podcast. I am your host, Daniela, and today we are diving into a topic that I feel incredibly passionate about, and that is spa memberships. Now I guess I should clarify here that I feel incredibly passionate about recurring revenue in your business, and the most direct path for recurring revenue in a spa is through membership.

Now, not just any membership, right, but the kind that actually helps you to create predictable, sustainable revenue in your business. And, I mean, just imagine checking your account. It’s the first of the month, right? You’re you’re logging into your booking software, you’re checking your account, and there’s already enough revenue in there to cover your, no kidding, expenses for the business for the entire month. I mean, talk about life changing, right? Like the level of stress goes down, the the ability to lead our businesses from a grounded place, instead of from a fear place, that when there’s lack or scarcity of money, then that fear can bubble up and scenarios.

Anybody that’s watching this video, you can see my dogs just laying in the background. It’s so hot today, and they are not gonna go anywhere but beside me. So there they are.

Okay, so I’m back to the show. So whether you’re a solo provider, whether you have a team, if you are not already leveraging memberships in your spa, you are leaving a massive amount of money on the table. Okay, so my goal for this episode is to help you see why I believe that every single spa should strive to have a minimum, at minimum, $10,000 in recurring revenue from memberships every single month.

Now, of course, you can go more than that. We have Growth Factor clients who have three, 400 members, and that’s an amazing place to be. But let’s set a goal of hitting 10,000 in recurring revenue as a starting point. Okay, so this one decision can help your leadership so much it can help you step into that role without feeling like you’re constantly having to be out there hustling to get that revenue in, you can step into the role of Spa CEO with confidence and with clarity.

So let’s talk about why memberships are essential. And according to Citibank, 82% of businesses are adopting subscription models because it allows them to really have stability, right? It can have stability in business when so many things are unpredictable, and as humans, we are not fans of uncertainty. Okay, so there’s got to be something to it. If we’re seeing 82% of businesses are adopting this model. Okay? So there’s a trend there. There’s a reason that that’s happening.

But it’s more than just numbers. Okay, it’s more than just like that peace of mind that you as the founder and CEO have. It’s actually giving you the ability to plan what you want to do in your business. It’s giving you the ability to hire, to invest in new devices, to actually go and do that training, go to that show that you wanted to go to take a real vacation with your family, you know, and you’re not going to have to worry about where the revenue is going to come from. If you’re going to be gone for a week, it’s coming from your membership.

That’s how we build a business around the life that we want to live, right? We want to relieve ourselves of these stress stressors. But memberships like yes, the revenue is amazing. The peace of mind is amazing. What it allows us to do is amazing. But they also build community with your clients, they build consistency and predictability and brand loyalty. So when your clients are on a membership, they’re going to come in more often, they’re going to stay longer, they’re going to spend more because they feel that they belong, right?

They’re in a community we are selling so much more than clear skin, right? We’re selling confidence. We’re selling a sense of belonging. We’re selling self care, right? There’s so much more than that, okay? But what I hear, and I actually just last week, had somebody ask me this question. I. I said I don’t want to do a membership. It’s not I’m not thinking about it at all, because I’m already booked out, and if I do a membership, I’m going to lose money.

Okay, okay, let’s have some real talk here. Though, if you are booked out more than six weeks in advance, you probably are under charging. Okay, I’m going to say that again. If you are booked out more than six weeks in advance, I know that feels good for your ego. I know that that gives you predictability, but my guess is that you are seriously undercharging for what it is that you’re offering.

Okay, you can increase your prices create more space on your schedule. Yes, you’re going to lose people when you increase your prices? Yes, I understand that our current state of the economy makes it very scary to increase prices, but we need to look at our numbers and understand like, are you priced at a point where you can actually be profitable, or you just on a slow roll to just burning yourself out with exhaustion. So really, really important to look at that piece there.

Okay, being booked out does not equal profitability, okay? So there’s two different types of memberships, all right? And so when we’re talking about memberships, I break them down to an annual model and a monthly model. And actually, there’s a third type that I’m going to talk about. I’m not a huge fan of it, but it’s, it’s out there, and so I’m going to talk about it too.

So the annual model, I call it the Costco style, right? This is where you pay a flat fee and you’re going to get access to discounts. So think about like Costco. You pay your membership fee 55 or 95 bucks, or however much Costco costs for a year, and then you can go in and you have the privilege of shopping there and getting, you know, enormous amounts of items at a discounted price. So for spa, what we’re looking at is you’re going to pay your annual fee, which is usually 199 something like that, and then you have a member price that you’re going to get throughout the year.

Now I typically recommend this model for solo providers, people that are just starting out with membership, that maybe don’t have the bandwidth to deal with the administrative pieces of a monthly membership. And so it’s administratively it’s a lot easier, right? They pay the one time fee. You add a tag in there if they’re a member or not, and then they get this pricing or this pricing. It’s very simple.

The cons to that method is that and think about how frequently you go to Costco. So I’ve had a Costco membership for years. However, I go to Costco maybe twice a year. Okay, it’s not like my initial place where I’m always gonna go do my grocery shopping. There’s certain things that I get there, but then I have a membership at a Thai massage place. I love Thai massage. The place that I go to is amazing, and it’s a monthly membership, and I go every single month, because if I don’t go, I’m paying for it every single month, right?

So that is making me go there every single month, and I’m getting the benefit of feeling relaxed in my body. I feel like I’m taking care of my body. I feel like I’m stretching my body. It’s always a really great reset, so I’m going and doing that every single month. If I were paying for my Costco membership every single month, I probably would shop at Costco more. But it’s not front of mind. I’m not seeing that charge go through every single month, right?

So let’s talk about the monthly model here. Okay, and this is my favorite. So the monthly model is about consistent engagement and predictable cash flow. So this is the model where you’re offering, you know, 199 a month, something like that. It’s usually anywhere between 99 to 199 is what I’m seeing as a price point. And for that they’re going to receive, you know, one or two services, so it can be a facial or chemical peel.

Every single month, they get to pick what it is. And then, in addition, they’re going to have, you know, a certain amount off of upgrades, or they’re going to have a percentage discount off of retail. They’re going to get invited to members only events, if you are a medical spa, or Med Spa light, as I like to call the such a difference in med spas, right? There’s like the big, you know, DERM offices, and then there’s the practices that only want to do, dermaplanes. Micro needling.

But because of scope of practice laws, they’re technically a med spa. So I kind of call those Med Spa lights, but I digress. So if I’m looking at like, if I have a medical service, I may have a certain amount off of a medical service included in my membership, and we see this also with an actual Med Spa. Not that they’re not, but like a more traditional Med Spa that’s offering injectables and maybe energy based devices, they may have a unit price of talks.

So if you’re doing esthetic services, you have estheticians doing facials and chemical pills, and then you have nurses doing injections and energy based devices. You may sell the membership, and they’re going to get a facial every single month, right? It’s focused on the maintenance portion, but they additionally are going to get a per unit cost of talks, and they’re also going to get X percent off of energy based devices. So you’re really promoting cross selling between the different departments of the practice and the membership is the thing that keeps them coming in month after month after month.

Okay, so I and let me just tell the third model as well. So I do see this

. This is kind of like your spa bucks account or your cash account, where a lot of practices will do $99 a month, and then that just goes into your bank, and then you can use your bank on whatever you want. The reason that I’m not a huge fan of that one, and listen, just because I’m not a huge fan doesn’t mean that it’s not going to work for your practice.

There’s a lot of practices that this works really well, so I’m giving you my advice and my experience, but you have to take that and apply it to your business and your demographic of who you’re serving, okay? But the reason that I’m not a huge fan of it is because I don’t think it does a great job of creating that relationship piece.

They’re yes, they’re paying their $99 to put in their bank every single month. However, especially talks, patients are coming in every three months and just emptying their bank, but they’re not going and doing the other services in your practice. And we know that for patients to get the very best results, they’ve got to be on good home care. They’ve got to be doing maintenance treatments look like neurotoxin is not going to save your life, right?

Like, if that can’t be the only thing that you’re going to do, you’ve got to address your skin concerns with a variety of different treatments and services. Okay? And so I do see that very often now, unless you’re just an incredible marketer and have an incredible client journey where you’re cross promoting and getting people to do different services, I think that the safest, most predictable, most profitable membership model is the monthly model.

Okay, so how do we get people in in the first place? I love having a founding members promo. Okay, and here’s the deal, like I have for the past 20 years been in the spa industry, and anything that I’ve done with marketing, I love looking at what other businesses are doing outside of our industry. I love looking at my own behavior. What gets me to actually purchase something and then saying, Okay, how can I apply that to spa? How can I get that into like, how could I apply that into a model that would make sense.

So this model the founding members at, you know, the first 100 members get 99 for life. If you’ve ever been to a Pure Barre, that’s their promo, right? Anytime they open a new franchise, that’s what they do. The first 100 members, you get 99 for life. And that is something that. And I think their regular price for the Unlimited is somewhere between 179 to 199 something like that. And so it’s very similar to the type of membership that we are offering in the esthetics industry.

And so having that 99 for life, that’s a huge savings. You’re not going to want to let that go, right? And so starting out with that, just those first 100 members, that’s going to get you your 10,000 in recurring revenue. I mean, how amazing is that? Think about the amount of money you’re going to be spending on marketing. It’s going to lower, right? Think about your promos. Not going to have to come up with a new promo every single month your membership is the promo.

That’s it for memberships to be successful, the promo every single month is the membership. You can highlight different pieces of it. You can have a members only event. You can do different things, but it all goes back to the membership. Okay? So it’s going to make your marketing efforts so much easier. Your monthly perks, like you’re always just going to love on your members so much. You want to do events, you want to have exclusive offers, you want to do things that’s going to make it fun and exciting and engaging.

Because remember, part of the benefit, whether it’s understood or not, is feeling like they are part of a community. Okay? People are craving community in such a deep way. Guys, it’s been a rough couple of years for business. We went from COVID to natural disasters left and right, to inflation to, you know, uncertainty with an election year to uncertainty with global conflicts. There’s so many different pieces going on in business that are much more complex than what we’ve been going through previous to these past five years.

So give yourself a pat on the back. Give yourself some credit. Be really proud of yourself for being where you’re at, because this has been a really challenging time, and it’s important to acknowledge that, and it’s also important to celebrate how far that you’ve come. But because of those things, whether you’re in business or not, there’s been a deepening for the desire to have community, to belong.

And people find that oftentimes, women in particular, going to a spa for self care. But if you’re like, you know, my kids are five and eight, and it’s just a busy time, right? So the people that I’m hanging out with socially are also other parents. Well, when I go to the spa, if I’m going to a party there and some type of or members only event, I’m going to have the opportunity to connect with other like minded women.

Maybe they’re moms, maybe they’re not, but I’m gonna talk about me instead of, you know, talking about my kids or talking about their school or whatever it is, right? It’s a different level of fulfillment and belonging and feeling like you’re an adult. You’re giving that to people in your practice, whether you realize it or not. And so there’s so many different benefits here.

Okay, so let’s talk about what this means for you as a CEO, and how having that minimum of 10,000 in recurring revenue. And by the way, I, you know, I love doing some calculations here. So I was doing some calculations on my notebook before this call, before I started recording. And if you do 50 founding members at 99 so 99 for life, right?

You You’re calling your existing like active clients. You’re getting your really VIPs that are big supporters of your brand. Those are gonna be your founding members. Okay, let’s say that you choose to open 50 spots for your founding members at 99 okay? If you get 11 members per month for the next year, 11 guys, right? You’re typically open 20 to 25 days a month.

So if you get 11 people a month, which is not a really, you know moonshot goal. By the end of the year, if you are able to retain those people, you will have 176 members, and you will be generating 30,000 a month in recurring revenue. Imagine how that would feel. Imagine how you would operate your business. Imagine where else you could go, or what else you could do, or the life that you could live with 30,000 a month in recurring revenue.

And it’s really not that far off. It’s staying focused on one thing. All your marketing efforts go towards the membership. All your client journey goes towards the membership, all your new patients, you’re talking to them about the membership. When you have that relationship, remember, it is 50% easier to retain a client than to attract a new one.

So by doing that, you. It actually gives you the time and space to think. Gives you the time and space to plan. It allows you to pay yourself without flipping out. It allows you to make strategic hires and know that you know where their salary is coming from. Okay, so you’re not starting at zero every single month that’s stressful, that’s creating anxiety, right? That’s creating this, like, lack of boundaries, right? Because you’ve got to make sure that you’re getting everything done.

So it’s really, really important to look at and understand what is possible with a membership. Now I’m giving you just a high level view. I don’t want it to sound like it’s gonna be all rainbows and unicorns, right? There’s a lot of tracking that needs to happen. There’s client journeys that you need to create. There’s administrative pieces that go to it. You’ve got to make sure that you have member agreements.

You’ve got to be able to understand your policies if someone wants to cancel, or if someone, if you live in a place that is, you know seasonal, that people are not there in the summer or not there in the winter, or whatever it may be so there’s, there’s pieces that go into it. So I don’t want it to be like, Oh, here’s my magical solution. It takes work, but it is worth it.

Okay? So I want to encourage you that if you are not offering memberships, really consider it okay. This is the time and ask yourself, like, if you already have a membership, is it optimized? Is it growing? Is it giving you peace of mind? And if it’s not, what are you going to do about it? Right? Because this is going to be the focus. Make this the focus, make this the goal, Make this your critical number for the next year.

And goal number one, cover your No kidding, expenses through your membership revenue. Okay. Goal number two, inch it up and inch it up and inch it up, all right, to whatever is going to be necessary for the life that you want to live.

All right, now we do have a Membership Best Practices Guide. We’re going to link that up. If you have not downloaded that already, go ahead and just comment memberships if you see this on social or we’ll have a link in the show notes for you to be able to download our Membership Best Practices Guide. It can give you this in summary, it can give you a checklist of some different things that you need to do to evaluate your membership and understand what is right for you?

Okay, so get out there. Focus on those memberships, and I can’t wait to hear about your success.